President-elect Donald Trump warned on Thursday that U.S. companies would face "consequences" for outsourcing jobs abroad, as he touted his early success in persuading an air conditioner maker to keep about 1,000 jobs in the United States rather than move them to Mexico.
"Companies are not going to leave the United States anymore without consequences. Not going to happen," the Republican said
on a visit to a Carrier Corp plant in Indianapolis.
Trump, who takes office on Jan. 20, did not say what the consequences would be, but he frequently threatened during the election campaign that his administration would put a 35 percent import tariff on goods made by American manufacturers that moved jobs offshore.
It is unclear what steps would have to be taken by federal authorities before Trump could retaliate against individual companies shifting jobs abroad.
Trump also did not address whether Carrier's parent company, United Technologies (UTX.N), would face any consequences for continuing with plans to move 1,300 other Indiana jobs to Mexico.
Trump made keeping jobs in the United States one of the main issues of his campaign and frequently pilloried Carrier for planning to move production to Mexico as he appealed to blue-collar voters in the Midwest.
Apparently under pressure from Trump, Carrier announced this week it had agreed to keep more than 1,000 jobs at the plant and at its headquarters, while still planning to move more than 1,000 other U.S. jobs to Mexico.
Trump said his negotiations with the maker of air conditioning units were a model for how he would approach other U.S. businesses that are tempted to move jobs overseas to save money.
He pledged to create a healthy environment for business through lower taxes and fewer regulations.
"I just want to let all of the other companies know that we're going to do great things for business. There's no reason for them to leave anymore," Trump said.
If that approach did not work, there would be penalties, Trump warned.
TAX INCENTIVES
The deal marked a quick win for Trump, who has spent most of his time in New York since the Nov. 8 election building his team ahead of January's inauguration, when he will succeed Democratic President Barack Obama.
Media outlets reported on Thursday that retired Marine General James Mattis would be named defense secretary, but a Trump spokesman said no decision had been made.
Trump toured the plant in Indianapolis and shook hands with workers on an assembly line. Some workers yelled: "Thank you Mr. Trump" and "Thanks Donald" as he greeted them.
Carrier confirmed that Indiana agreed to give the company $7 million in tax incentives. A source briefed on the matter said the tax incentives were over 10 years and the company had agreed to invest $16 million in the state, where Trump's vice president-elect, Mike Pence, is governor.
Carrier still plans to move 600 jobs from the plant to Mexico, the Wall Street Journal said. Reuters reported earlier this week that Carrier also still intended to close a factory in Huntington, Indiana, that employs 700 people making controls for heating, cooling and refrigeration and move the jobs to Mexico by 2018.
SANDERS CRITICISM
U.S. Senator Bernie Sanders, who lost the Democratic nominating race to Hillary Clinton, said the Carrier deal was incomplete and left the incoming Trump administration open to threats from companies.
"Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives," Sanders wrote in a Washington Post opinion piece on Thursday.
He noted that Trump had originally said he would save 2,100 jobs that Carrier planned to move to Mexico.
"Let’s be clear: It is not good enough to save some of these jobs," Sanders said.
Despite Trump's deal, employers elsewhere in Indiana are laying off five times that many workers because of foreign competition.
Trump was due to hold a rally in Cincinnati later on Thursday and address supporters who helped him win the swing state of Ohio in his upset victory over Clinton.
The Indiana and Ohio stops are Trump's first public events since he won the presidency.
At the Cincinnati event, Trump and Pence will talk about what is ahead and the “positive change” Trump will bring to the country, spokesman Jason Miller said.
On Wednesday, Trump said he would nominate former Goldman Sachs banker Steven Mnuchin to lead the Treasury Department. Trump named Wilbur Ross, a billionaire known for his investments in distressed industries, as his nominee for commerce secretary.
The Cincinnati rally follows a car and knife attack this week by a Somali immigrant and Muslim student, Abdul Razak Ali Artan, at Ohio State University in Columbus that injured 11 people. The Islamic State militant group claimed responsibility.
In a Twitter message, Trump said: "ISIS is taking credit for the terrible stabbing attack at Ohio State University by a Somali refugee who should not have been in our country."
The Council on American-Islamic Relations accused Trump of seeking to exploit the "tragic situation in Ohio."
(Additional reporting by Steve Holland, Doina Chiacu and David Shepardson in Washington; Writing by Lawrence Hurley and Richard Cowan; Editing by Alistair Bell and Peter Cooney)